I dragged my eldest kid out fishing recently for some good ol’ fashioned father son bonding time. There’s nowhere better to be than on the water.

Of course he complained the entire time – bored out of his skull. It didn’t help that the fish weren’t biting, but come on kid, I’m trying to have a Shimano-powered, Norman Rockwell moment over here.

But after we finally got our hooks in the water he says, ‘this is too much work Dad’.

Too much work? This isn’t work, this is fun!

But I pondered his complaint, and he’s actually right

A lot of time fun, and work, require the same degree of effort. When you don’t get a positive outcome from your effort, all you’re left with is work.

When invest our money for tomorrow instead of spending it today, it’s a similar feeling. We’ve done the work, but where’s the reward? 20 years from now at retirement?

Delayed gratification, should be considered as the central tenet of the doctrine of passive investing. In the sacrosanct communion of frugality and dollar cost averaging, low-cost index funds are transubstantiated into the omnipotent force of compounding returns. We all gladly accept an average rate of return, so long as we’re beating fees, tax, and inflation. Just don’t look too closely at that inflation story though…Once you know what’s in the hotdog, and once you learn the rate real inflation tracks at, you’ll never invest the same way again.

To preserve our current wealth, and to escape the drag of theft through taxation, and most importantly, to outpace the real rate of inflation, we need to think differently, come to our own conclusions. We accept uncertainty around timing, but we retain conviction in outcome.  We shouldn’t be afraid to see the problems for what they really are, understand the current solutions, and then get to work finding the better ones.

Let’s break it down.
When you’re trying to understand what a ‘good’ return is, you need to consider a few things:
 
– What are the fees involved with the investment
– What are the taxes payable
– And what’s the rate inflation likely to be.
 
It’s that last one people get short-changed on, in my view [and what follows is OPINION only].
 
CPI (or the consumer price index) DOES NOT ACCURATELY capture the loss of our purchasing power over time.
 
So if FEES were 0.50%, taxes were 2%, and CPI was 3%, then 5.5% is the MINIMUM you need to get before you start receiving something for yourself.
 
But what if the TRUE loss of purchasing power was measured not by CPI, but by calculating the rate at which new currency was being created? Some suggest this is a rate closer to 10-15% each year.
 
At a minimum then, we’d need to get a return closer to 15%, just to preserve the wealth we currently have, let alone getting our money to work for us.
 
The ‘industry’ will place the focus on fees and taxes every time, but what about that last one?

Check out this conversation I recently had with Peter Dunworth, director at Networth Advisors over in Australia.  Peter is also the founder of The Bitcoin Adviser – and we’ll talk a little about how that works in this episode.

After losing all my Bitcoin recently in a boating accident, I decided to start holding any new Bitcoin in a special type of ‘multi-signature’ wallet.
 
This way, if I lose access to my wallet, or I pass away, my family still receives the benefit of what this asset might bring.
 
There’s a few ways to store your Bitcoin safely, but If you’re concerned about the government, other criminals, or even the bottom of the sea gobbling it up, do something about it sooner rather than later. Chat with me personally about this, or you can learn more about The Bitcoin Adviser here.